CEOs Are Worried About a Trade War and Recession in 2025 — Should You Be?

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The new year typically offers a chance to start fresh and reboot priorities — but not for everyone. A new survey of 1,700 participants, including CEOs, boards of directors, and other executives, outlined a wide range of issues that worry the business community.  

Some challenges have brewed for years, while others are more recent. For instance, with President Donald Trump back in office, the prospect of a global trade war has emerged as the most urgent and pressing matter. In fact, a significant portion of respondents, according to The Conference Board, believe that rising tensions between the U.S., European Union, and China could have the most negative influence on international trade.

Furthermore, the potential for a recession to happen remains a dark cloud and would significantly impact economic growth. On this matter, roughly half (46%) of CEOs are cautious about a potential economic downturn, a decrease from 53% last year.  

And while the worst of the COVID-19 pandemic is far over, its legacy still echoes in boardroom meetings. The once-in-a-lifetime event exposed just how fragile global supply chains are, leading to sky-high consumer costs globally. Consequently, now, seven out of 10 CEOs plan to reform their supply chains in the next few years.  

Another hot-button topic was discussed: Artificial intelligence (AI). The consensus on the relatively nascent technology was its promising results in improved worker productivity. To date, AI has augmented human labor, not replaced it. But the possibility of substituting human workers in the future is not entirely out of the equation. The biggest roadblock across industries is finding skilled workers who can successfully integrate the technology into operations.

In this article, GOBankingRates listed key takeaways from the C-Suite Outlook 2025 and break down their concerns about a potential U.S. recession and trade war.

Geopolitics and Trade  

Over 500 CEOs see a potential global trade war between the U.S., the European Union (EU) and China as the biggest geopolitical peril for this year. And for good reason.

In recent weeks, Trump initially considered imposing tariffs on its northern and southern neighbors in Canada and Mexico, before ultimately suspending the idea for 30 days. Other nations caught in the crosshairs of tariffs include China and the EU, with China now facing a 10% tariff on all imports, and reports suggest the EU could be next, as noted by the BBC.

Among American CEOs, 34% view this provocation as a major risk that would adversely impact business, while in Asia, that figure spikes to 50%. Additional geopolitical risks include cyberattacks by foreign entities and a sharp rise in energy costs.  

Economic Uncertainty and Recession Fears  

Forty-six percent of CEOs fear a possible recession for 2025. This trend is down from 53% last year, but nonetheless, the threat remains. It is worth noting that recessions typically occur every six to seven years, this concern is bolstered by another cautionary tale: Warren Buffett’s cash holdings.

The Oracle of Omaha is holding a record $325 billion in cold-hard cash. To put it another way, when the world’s most successful investor is selling equities to the extent he has, it could be a bellwether sign of gloomy things to come. After all, he famously coined the aphorism, “Be fearful when others are greedy and greedy when others are fearful.”

Could he be onto something? Only time will tell.

The Federal Debt  

The U.S. government carries a national debt of $36.22 trillion. And Wall Street is worried. Fifty-one percent of CEOs consider Uncle Sam’s spending habits as a cause for concern, given its consequences and the cost it carries.

The Government Accountability Office, a nonpartisan and independent agency that serves as a watchdog, reported that interest payments on publicly held debt surged greatly over the past three fiscal years, rising from $497 billion in 2022 to $909 billion in 2024 — an 83% spike.  

Supply Chain Resilience and Changes  

The vulnerability of supply chains in recent years has not gone unnoticed. Seventy-one percent of CEOs plan to restructure their company’s supply chains within the next three to five years.

For comparison, only 51% of CEOs had similar plans a few years ago, highlighting a growing urgency. Planned measures to increase efficiency and mitigate risk include leveraging AI, as well as diversifying vendors to reduce logistical challenges if another unforeseen event happens.  

ESG and Sustainability  

As anthropogenic climate change exacerbates the unpredictable weather we have seen, businesses are looking to find ways to be more resilient.

Across the globe, 34% of CEOs highlighted climate events as the leading ESG factor that could affect business operations, ranking it just behind sustainability — which 39% identified as the primary ESG concern. Interestingly, these findings varied by region, as American CEOs look to prioritize renewable energy, while European and Japanese CEOs are more focused on reaching carbon neutrality.  

Strategies for Profit Growth  

If there is one universal truth, it’s this: Consumers dislike price hikes. Luckily, not many CEOs plan to raise prices in 2025. But to ensure shareholders are still happy with the bottom line, they will prioritize innovation, technology and product improvements to drive sales.

Nearly 4 out of 10 CEOs believe innovation being a key focus will boost profit margins, while 29% believe the solution is delivering new products and services. Another focus, again, was AI, with 10% planning to invest in integrating the technology to enhance marketing and analytics.  

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